GulfHindi English Desk: In today’s era, a bank account has not only become a part of the common man’s life but also a necessity. Whether it is a source of receiving salary or availing benefits of government schemes, a bank account provides us with many conveniences.
Savings Account: The Most Popular Option in the Country
In India, most people use a savings account for their cash transactions. In reality, there is no limit to the amount of money that can be kept in a savings account, but you are required to inform the department about the deposited amount.
Tax Rules and Savings Account
According to the rules of the Central Board of Direct Taxes (CBDT), it is mandatory to inform the bank about the amount exceeding Rs 10 lakh in a financial year. This rule also applies to investments made in fixed deposits (FDs), mutual funds, bonds, and shares.
Tax is also applicable on the interest earned on savings accounts during the financial year. Under the Income Tax Act, individual account holders do not have to pay any tax on interest up to Rs 10,000 per year. If the interest exceeds this amount, tax has to be paid. For senior citizens, the limit is Rs 50,000.
In addition, the interest earned from a savings account is added to your other income and taxed accordingly.
Interest Rates on Savings Accounts
India’s major government and private banks offer an interest rate of 2.70% to 4% on savings accounts. The interest rate is 2.70% for savings accounts with a balance of up to Rs 10 crore and 3% for amounts exceeding Rs 10 crore. Some small financial banks offer interest rates of up to 7% on savings accounts with certain conditions.
en.gulfhindi.com News Summary
👉The use of a bank account has become essential in today’s age.
👉Bank accounts provide various benefits such as receiving salary payments and availing government schemes.
👉Savings accounts are the most popular option for cash transactions in India.
👉There is no limit to the amount that can be stored in a savings account, but information about deposits must be provided to the bank.
👉According to the rules of the Central Board of Direct Taxes (CBDT), information about cash transactions over Rs. 10 lakh must be provided to the bank.
👉Income tax is applicable on the interest earned on savings accounts.
👉Personal account holders do not have to pay tax on interest up to Rs. 10,000 per year.
👉For senior citizens, the limit is Rs. 50,000.
👉The interest rate on savings accounts in India ranges from 2.70% to 4%.
👉Some small financial banks offer interest rates up to 7% on savings accounts.
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